Debt Consolidation Care Answers
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How quickly debt settlement program works?  

0
Good Day!

I wanted to inquire about debt settlement and how quickly this works? I have heard that it takes several months even up to a year or so to get the credit card companies to make an agreement and also your salary could be taken in extreme cases, is this true? Is it worth it?

I am now trying to consolidate my credit cards and I want to know if I should go the settlement way first. What are the pros/cons HERE?

Thank you! icon_surprised.gif
 

asked Nov 8, 2004 07:54 AM

Anonymous
Best Answer
10
best answer

Hi,good day to you too!

Debt Settlement needs a lot of wise movements and long term thinking.You have not mentioned the type or amount of debt that you are undergoing.Thus there cannot be any specific answers to your query.In general there is no fixed time in the settlement of debts.Your debt settlement period depends on several factors like the amount and type of debts you are under;your income level,your bill payment habits and how good a rapport you share with your lenders.

Consolidating your debts means coming to a settlement with your debts.You settle your debts by coming to oblige certain terms with your creditors.Your debt consolidation counsellor negotiate with your creditors and consolidate your debts into one single amount which can be paid in easy installments.

As you know every system has its pros and cons.But going by the popularity of debt consolidation, and the way it has helped hundreds of debt burdened people, I recommend you to go for it.

For detailed information on debt settlement click here.

answered Nov 8, 2004 10:08 PM

17 Answers

7

Dear Katherine,

Welcome to debt consolidation care forums, let me explain the role of debt settlement agencies and why they are prefered by creditors.

If the debt is due, creditors wait for sometime and then hand over it to credit collection agencies. Creditors still pay an amount to credit collection agencies, even after a lot of harassment and threatening collection agencies may not get a single penny. Moreover bankruptcy implies unsecured creditors not getting a single penny.

So creditors have a fixed (and variable) schemes for debt consolidation firms known as fair share, creditors give an amount to debt consolidation firms for settling the debts. Here debt consolidation firms are working as collection agencies for the creditors and the best part is, it is starting at debtors end. They welcome this move.

If you can negotiate well with your creditor , then your credit report status will be "paid as agreed". Remember one thing that creditors are getting money through debt repayment not by making your credit report negative. They agree on these issues if negotiated well.

Regards
Vikas

answered Jan 7, 2005 05:55 PM

0

I think the question that was first asked by Alexxis has not been answered. I wish I had the accurate response, and I am now very curious to know the answer myself. I am also doing some research on debt settlement and have not been able to find whether my credit report would be badly affected and if there are truly reliable companies out there that have successfully done this for others. I am still skeptical. Will settlement have a negative impact on my credit card report? .. .what does it mean in those terms? would I be in a red flag list with a terrible credit rating? ... I have been in credit counseling for two years and my situation is now worse... It has not made a bit of a difference ... Some smart help would be greatly appreciated. Best wishes!

answered Jan 7, 2005 03:08 AM

Anonymous
0

Just a note on Settlements since we have been and are currently going through them now- I made the "mistake" of using a company that is now shut down by the FCC so be very careful when using these companies.

Here is the lowdown of what happened to us-
We were about $25,000 in debt with credit cards only, 8 total, in the service we settled on 3 cards.

The pros: With this company they handled all the phone calls and communication with the credit companies which helped my husband keep his sanity. icon_confused.gif I believe you have forms on this site to contact the companies yourself for this issue, if you have the time and energy to be persistant.

The cons were of course you quit paying to any of the companies so the interest rates and fees continue until it is turned over to the collection agents, in some cases the amount you owe can come close to doubling. Also the settlement company charges an up-front fee, a monthly fee and also a % of the amount settled. Which is a lot of money disappearing for the piece of mind of no phone calls. You take what you were paying to your cards and set it aside in a seperate account. Once you had 50% of what you owe on your smallest card- contact them to settle. Of course most of our cards were well overdue before settlements happen.

And be aware there are companies that will go directly to a judgement- One of ours did, and in that case we set up a payment agreement with the lawyers to keep it out of the courts and adjusted our other payments accordingly.

Since the settlement company closed I have settled one card on my own, providing a verbal offer to the company in a two month payment option- After viewing this site I wish I would have used the written forms and also got our credit cleared in the process, but I will try that with the other cards I have left. If I would have known eliminating the credit record was an option I would have pushed for that a bit more since it does effect your credit rating- Our goal was to get our things paid as our credit rating was already bad with employment and late payment issues already.

If you have the time a patience to do the legwork and paperwork yourself and you have a lot of debt, and a little bit of funds to take care of it this can work for you. We have settled each card for 60% or less of what we owed and look to be free of creit card debt in 1 more year. It is a lot of work, and if you are already in trouble this is a way out without bankruptcy, which is what we were trying to avoid. I think settling and paying something on the debt, is better than bankruptcy and paying nothing in my opinion.
We now have $9000.00 left (settling at 50%) to pay on our debts which we see paid/settled in 1- 1 1/2 years.

Will it effect your credit rating:YES, but with negotiations it can be lessened- and as they are paid off, you will have more piece of mind if nothing else. Do what I did and go back and forget all transactions of your card activity except the settlement letter/payoff note and celebrate!

Will it help pay down debt?
If you are consistent, and can save up/beg, borrow for lump sum settlement amounts or agree to 1-2 payments for payoffs some creditors will work with you- some won't. You can settle for about 50% of what you owe.

answered Feb 27, 2005 09:14 AM

Anonymous
0

Hi Banan05,

Welcome to the debt consolidation care forum. We highly appreciate you for sharing your enriched experience in our forum. This will be of great benefit for people who want to opt for debt settlement.



Quote:

After viewing this site I wish I would have used the written forms and also got our credit cleared in the process, but I will try that with the other cards I have left.



We would also like to thank you for findig our site of some utility. By filling up forms with your basic information and sending it to the creditors through the debt settlement company is one of the most important steps in the process of getting your debt settlement program approved.

Keep posting such information with your knowledge and insights and share it with other members of the forum. icon_biggrin.gif

Regards,
Jason

answered Feb 28, 2005 01:27 AM

0

Hello. I have 7 credit cards currently enrolled in a debt settlement program. I stopped all payments to them 9 months ago, and the debt settlement company took over contact with them. At first they continued to call me, but in the past 3 months the calls have stopped, and 2 cards have been settled. So far all seems to be going as planned. My credit rating has taken a very bad turn from high 600's to low 500's. The settlement company also has a credit correction program once the debts are all settled. I won't know how that works until I get to that point, but so far I'm happy with the progress. Has anyone out there completed a 3 year program like this?? If so...please share your experience. How badly was your credit hurt? How long did it take to recover? Were you sued during the program?

Thanks,
Kim

answered Oct 16, 2005 07:22 PM

Anonymous
0

NDebt, choosing a debt settlement program is a bit risky decision towards your credit ratings. The creditors report your accounts as 'settled' to the credit bureaus and thus, this negative information will stay on your report for as long as 7 years.

If the consultant can negotiate with your creditors and convince them to report your accounts as 'Paid as Agreed', you will be largely able to retain your credit ratings.

Regular and timely payments towards your debt are the best way to retain your credit ratings. This also helps in increasing the credit scores effectively. Once the negative information appears in your credit report it will stay for 7 years and lowers the scores. So, insist the consultant to convince your creditors so that they don't report your accounts negatively.

No one is sued during the program as long as you are paying towards your debt account. But you should be regularly interacting with the settlement company to know the latest update. Know the latest reaction of your creditors and how much the debt has been negotiated. Also, keep a record of all the monthly installments that you have contributed towards your debt account.

Ben

answered Oct 17, 2005 10:05 AM

ben
0

I am new to the debt consolidation program. The people that I am working with are very nice and always get back to me when I have a question. It is a good relief to not have to worry about which bill I'm going to pay on time this month. Money comes out of my account every Friday and shoots off to the DC Company and I don't need to worry about it. It has actually helped me budget more efficiently because I know exactley how much I have left over from my check every week without worrying about paying 5 different bills at different times. I will share more knowelege about my experience once I get more results which will come with time.

-Sarah icon_surprised.gif

answered Oct 20, 2005 07:37 AM

0

I am trying to figure out which company is not going to rip me off if I consolidate my debt. Any help?

answered Oct 20, 2005 07:57 AM

0

kks148

You won't get ripped off as long as you keep a watch over your finance and make wise decisions. Being suspicious is good till you don't feel satisfied with the decision made. It's always better to do some research before you give your money to someone working for you.

I also did the same thing before consolidating my debt with a company after registering here. I am glad that this website has partnership with some of the good companies all over the United States. And I am sure, that 90% of the people here are also satisfied after working their companies.

You can discuss your problems with the consultant and make decisions as per your situation. He will provide you monthly statements of how your finance is used towards your creditors and do the needful negotiations to improve your credit file.

I assume that after having a discussion with him, you will be posting your good experiences about the company here. icon_biggrin.gif

answered Oct 20, 2005 10:13 AM

ben
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